The recent performance of the layer-1 blockchain continues to impress in the cryptocurrency market.
On January 14, the SOL token grew by a whopping 37%, going from $16,83 to $24,09 at its highest point.
After being considered one of the worst-performing cryptocurrencies in 2022, Solana is, as of right now, among the top winners.
On December 31st, SOL was around $9,98. Since then, SOL grew by over 130%, meaning that anyone who invested in Solana by the end of December is likely very happy with the results of the token so far.
What Is Causing Solana’s Outstanding Performance?
Following a rough moment for the blockchain in the aftermath of the Sam Bankman-Fried and FTX debacles, the Shiba Inu-themed BONK cryptocurrency has gained center stage in the Solana ecosystem in recent weeks.
BONK has just announced the establishment of BonkDAO. The inaugural BonkDAO council was made up of “respected Solana community members from Defi, Art, and NFT movements.”
On top of that, a report from the research group Citi Research indicates that Solana’s blockchain activity is not only high, as it is in fact increasing.
The culmination of favorable events, as well as the price of the token being undervalued after the FTX collapse culminated in this extraordinary resurgence for the blockchain.
Can Solana Face An “Exaustion” Period?
After such a major pump, investors are now wondering if that major market movement of over 130% favorable in favor of the asset will cause a sudden retraction.
According to the Relative Strength Index tool, Solana’s value is reaching levels of “overbought”.
According to the trading tool, Overbought stocks sell at a price that is higher than their inherent or fair worth. This indicates that it does not trade at its genuine value, but rather, it is trading at a considerably higher price than it should be.
This could mean that, while Solana is still going through an incredible performance, investors may wait a couple of days in order to see where exactly the SOL token will consolidate.
In fact, the current margin of around $23,00 is a historical resistance/support zone for the asset. Throughout 2021, SOL touched that resistance zone 6 times, before rushing past it and reaching $208,00 on September 8.